645 Ventures’ Dessy Levinson Explains How to Tell an Effective Story to Investors
Every startup has a story around its product. And being able to clearly and effectively tell this story to investors can make a huge difference when it’s time to secure funding. Labs mentor Dessy Levison, creative director for 645 Ventures, held a session to discuss her three tips for telling your story in a way that connects with and draws in investors.
Tip #1: Tell a story that explains the value of your product
When telling their story, entrepreneurs usually focus on explaining why they created their product. But explaining the value of the product and how it would benefit consumers in the long term is also essential. “When I hear stories that don’t quite work, it’s because there was no state change for the consumer. Why is the world a better place with your product? What’s the value for the consumer?” Levison says. “Good products have value in terms of money but also growth towards something positive.”
You also want to communicate a sense of urgency with your story. If investors feel like there’s nothing to lose if they don’t invest in your product, it may be harder to close deals. By creating a sense of urgency, you can convince investors that the best opportunity to fund your product is right now. “You have to get across some level of immediacy. If it’s like, ‘this is nice to have, but it will be just as nice five years from now,’ then people are not as compelled to make purchasing decisions,” Levison says. “And investors are not as compelled to make an investing decision. You need clarity on the value and the stake or else your story won’t stick.”
Tip #2: Don’t talk about your product like it’s a solution to the world’s problems
As an entrepreneur, you need to believe in your product. But don’t make the mistake of talking about it like it will solve all of your consumers’ problems. “Yes, things may get better after buying your product, but don’t say that without your product, everything will fall to pieces,” Levison says. Even if you have an outstanding product that addresses a common pain point, you can end up losing credibility when you sell your product so aggressively. “Sometimes, founders get intense when describing how bad things are, which generally doesn’t work. That leads to exceptionalism as well,” Levison says. “The idea that you’re the first person as a founder to have seen this problem and the only person who can solve it usually undermines your credibility.” Instead, try to focus on sharing your perspective on the pain point you’re trying to address. “Your product may not be one-of-a-kind, but you have a unique perspective on the issue, so get it across,” Levinson says.
Tip #3: Build anticipation throughout your story
To tell a good story, you have to know your audience. If you don’t know who your audience is, you won’t be able to connect with them. Every investor responds differently, so it’s essential to see their portfolio to have a better understanding of the type of products they invest in before you reach out or meet with them. If an investor’s only concern is getting their money back, selling an emotional story may not work. “Some people respond to emotion; other people respond to numbers. You have to try to connect with all of them,” Levison says. “Tell them where you’re taking them with your story. Set the stage and say by the end of this, you’ll understand why this is the best company.”
When you set the stage and create a feeling of anticipation as you tell your story, it allows you to reach your aha! moment together with investors. Your aha! moment is the point where your narrative ties together, and the reason or goal behind your product becomes clear.
One way to build your story to arrive at this moment together is by creating emotion throughout your presentation. For example, if you have a product that helps people translate languages, you can start by telling a story about an issue you had reading another language. Then, you can transition to speaking about what a significant problem language translation is globally. Finally, bring in your unique solution and how it will make the situation better.
“Ideally, you arrive at the aha! moment by describing how you’re going to change something and how someone’s state will improve. But you have to build emotion— there’s no hack around building real emotion and what explaining you’re in for and why,” Levinson says. “People buy-in when they trust your story and feel like they’re discovering the answer together with you. Even if nothing else comes out of the relationship, you will have built the kind of goodwill that over time, will bring you introductions or additional clients.”
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This post is based on content from a WeWork Labs programming session.
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